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MUMBAI: Depending on whether the reference point for IPL valuations is the first round auction of 2008 or the second round of 2010, media baron Kalanithi Maran has paid top or bottom dollar for the Hyderabad team.

Maran's Rs 425-crore pay check on Thursday to buy the beleaguered Hyderabad franchise - left without an owner following termination of Deccan Chronicle Holdings Ltd's contract last month - is less than half of what Subrata Roy's Sahara Group paid two years ago. But it is almost double of what Mukesh Ambani paid for Mumbai Indians in 2008, then the most expensive franchise.

Sahara had bid Rs 1,700 crore, payable in equal tranches of Rs 170 crore over a decade, to bag the Pune team. Rendezvous Sports, too, bid high for the now-defunct Kochi franchise at Rs 1,350 crore at Rs 135 crore per year. Although the Hyderabad franchise is for five years, for the sake of comparison, Sun TV's bid works out to Rs 850 crore, if a 10-year-period were to be considered.

Maran, a tough negotiator, who also owns airline company SpiceJet, made a surprise entry into the T20 league hoping to find synergies between his southern entertainment business and the cricketing spectacle. The Sun TV offer toppled that of PVP Ventures, which had fired a Rs 350-crore (at Rs 69.03 crore per year) bid for Hyderabad, and Jaypee Group's plans for a new team based in Noida. PVP is also a film financier down south where Sun has a formidable presence and, interestingly, is an investor in YSR Congress leader Y S Jaganmohan Reddy's Sakshi TV.

BCCI had invited bids for a new franchise through a tender floated earlier this month for 12 cities - Hyderabad, Ahmedabad, Cuttack, Dharamsala, Indore, Kanpur, Kochi, Nagpur, Noida, Rajkot, Ranchi and Visakhapatnam. The highest bidder for any of one these cities was to be declared the winner, which was eventually Sun for Hyderabad.

The board claimed the sale has happened at a 100% premium to what it had earned from DCHL when it first auctioned the Hyderabad team for Rs 421 crore as part of an original tenure payment schedule in 2008. The erstwhile owner had paid Rs 42.5 crore annually for five years until financial woes hit the team earlier this year.

On that count, the BCCI does end up earning double the amount from Sun as compared to what DCHL was contracted to pay until 2017. Still, the latest valuation benchmark - the first such instance after IPL founder Lalit Modi's controversial ouster from the cricket board - pales in comparison with what Sahara is paying for the Pune team. In fact, the latest deal lowers team valuations by almost 100%.

The Sun founder's late father Murasoli Maran and BCCI president N Srinivasan were classmates in their collage days, with the former politician helping Srinivasan's India Cements, which owns IPL team Chennai Super Kings, out of a crisis in the 1990s. The losing bidder PVP Ventures' managing director Prasad V Potluri said the board handled the latest auction process in an efficient and transparent manner. "At the end of the day, Sun was willing to write a bigger cheque," he added.

"At a fundamental level, the real value for a franchise has always remained Rs 90-100 crore. Any premium over and above this is a function of the opportunity cost of leveraging the franchise for overall corporate benefits," said R Gowthaman, chief executive officer of Mindshare, WPP Group's media planning agency. "Most of the team owners are leveraging it for various reasons. We need to wait and watch how the Sun group leverages it, and I see quite a few options in front of them, unlike the Deccan Chargers," he added.